The three biggest corporate cash hoarders in Toronto (and what we imagine they’re doing with the dough)
Last month, Bank of Canada governor Mark Carney accused corporate Canada of hoarding hundreds of billions of dollars of “dead money,” kicking off a heated debate over whether companies are being tight-fisted at a time when the economy could use a little stimulation. (Carney says companies should invest in Canada by spending the money or pay dividends to shareholders, while others say having large cash holdings is just prudent, considering that the global economic outlook is still far from certain.) The Toronto Star’s list of Canada’s top corporate hoarders includes three local (or semi-local) companies: George Weston Limited, Research in Motion and Magna International. Below, the answers they gave the paper—along with our own, speculative answers—to the question: What does one do with more than a billion dollars?
Company: George Weston Ltd. (parent company of Loblaw Companies Ltd.)
Value of cash holdings: $3.6 billion
What they say they need it for: To freshen up their Canadian Loblaw stores and North American bakeries, and for new investment opportunities. “We’re prudent in how we approach business. We want to make sure we have appropriate capitalization and appropriate reserves,” a Weston spokesperson told the Star.
What we imagine they need it for: We can’t shake the thought of Galen G. Weston surfing, Scrooge McDuck-style, on a huge pile of cash in a Loblaws warehouse in the middle of nowhere.
Company: Research in Motion
Value of cash holdings: $1.9 billion
What they say they need it for: To make sure the company can stay afloat while it attempts to regain market share from Apple and Android devices, launch BlackBerry 10 and generally turn things around.
What we imagine they need it for: A last-ditch bid to woo back the Canadian consumer by buying an NHL team (sure, Jim Balsillie has resigned from all his RIM responsibilities, but maybe the idea stuck?).
Company: Magna International
Value of cash holdings: $1.4 billion
What they say they need it for: Undisclosed
What we imagine they need it for: Founder Frank Stronach is making a bid for political supremacy in his native Austria. With $1.4 billion, he could buy every citizen of the country at least 15 plates of wiener schnitzel, which would surely boost his poll numbers.